-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, E8hv0i/Rgp0T+Loua88lv8iKDOLHV7j6uGNwczTXIgLu5SZTM6PhqrsywIUC6mUB veTKptbkPta8k0c/oi/3Mw== 0000890566-99-000635.txt : 19990514 0000890566-99-000635.hdr.sgml : 19990514 ACCESSION NUMBER: 0000890566-99-000635 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990513 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SIERRA PACIFIC DEVELOPMENT FUND CENTRAL INDEX KEY: 0000351698 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 953643693 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-11068 FILM NUMBER: 99619497 BUSINESS ADDRESS: STREET 1: 5850 SAN FELIPE STREET 2: STE 500 CITY: HOUSTON STATE: TX ZIP: 77057 BUSINESS PHONE: 7137066271 MAIL ADDRESS: STREET 1: 5850 SAN FELIPE STREET 2: STE 500 CITY: HOUSTON STATE: TX ZIP: 77057 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter ended March 31, 1999 ---------------------------------------------------- Commission file number 0-11068 ---------------------------------------------------- SIERRA PACIFIC DEVELOPMENT FUND (A LIMITED PARTNERSHIP) State of California 95-3643693 - ------------------------------------- ----------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification incorporation or organization) Number) 5850 San Felipe, Suite 450 Houston, Texas 77057 - --------------------------------------- -------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (713) 706-6271 ----------------------------------------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]. PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS The following financial statements are submitted in the next pages: PAGE NUMBER Consolidated Balance Sheets - March 31, 1999 and December 31, 1998 4 Consolidated Statements of Operations - For the Three Months Ended March 31, 1999 and 1998 5 Consolidated Statements of Changes in Partners' Equity - From February 13, 1981 (inception of Partnership) to December 31, 1998 and For the Three Months Ended March 31, 1999 6 Consolidated Statements of Cash Flows - For the Three Months Ended March 31, 1999 and 1998 7 Notes to Consolidated Financial Statements 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (a) OVERVIEW The following discussion should be read in conjunction with the Partnership's Consolidated Financial Statements and Notes thereto appearing elsewhere in this Form 10-Q. The Partnership currently owns a 93.45% interest in the Sierra Creekside Partnership, which operates the Sierra Creekside property. (b) RESULTS OF OPERATIONS Rental income for the three months ended March 31, 1999 increased $11,000, or 5%, when compared to the corresponding period in the prior year. This increase was primarily due to higher rental rates. The Property was 96% occupied at March 31, 1999. Operating expenses for the three months ended March 31, 1999 increased by $1,000, or 1%, in comparison to the same period in the prior year. An increase in property taxes was partially offset by a decrease in utilities and maintenance and repair costs. 2 Depreciation and amortization expenses for the first quarter decreased by $5,000, or 6%, primarily due to fully depreciated capitalized tenant improvements. (c) LIQUIDITY AND CAPITAL RESOURCES The Partnership is in an illiquid position at March 31, 1999 with cash and billed rents of $91,000 and current liabilities of $136,000. A source of cash is available through advances from the minority owner of the property, Sierra Mira Mesa Partners. The Partnership's primary capital requirements will be for the construction of new tenant space. It is anticipated that these requirements will be funded from the operations of the Property. (d) YEAR 2000 COMPLIANCE The Year 2000 Compliance issue is the result of computer programs being written using two digits rather than four to define the applicable year. Any of the Partnership's computer programs that have time-sensitive software may recognize a date using "00" as the year 1900 rather than the year 2000. This could result in a system failure or miscalculations causing disruptions of operations, including, among other things, a temporary inability to process transactions, send invoices, or engage in similar normal business activities. As a result, many companies' software and computer systems may need to be upgraded or replaced in order to comply with Year 2000 requirements. The Partnership employs a property management company to manage, operate and lease the property. The management company believes it will be ready for the Year 2000 date change by the end of 1999. The impact of Year 2000 non-compliance by other third parties cannot accurately be gauged. The total cost to the Partnership of activities associated with Year 2000 Compliance is not anticipated to be material to its financial position or results of operations in any given year. In January 1999, the Partnership began utilizing a new software program to maintain books and records. The new software program is Year 2000 compliant. The total amount of potential risk that would be reasonably likely to result from Year 2000 failures cannot presently be estimated. In the event the Partnership does not properly identify Year 2000 issues in a timely manner, there can be no assurance that Year 2000 issues will not materially affect the Partnership's results. The Partnership's contingency plan should systems fail due to the Year 2000 date change is to temporarily convert to a manual system. The Partnership believes it could temporarily operate on a manual system without adversely impacting operations. The preceding Year 2000 discussion contains various forward-looking statements which represent the Partnership's beliefs or expectations regarding future events. All forward-looking statements involve a number of risks and uncertainties that could cause the actual results to differ materially from projected results. 3 SIERRA PACIFIC DEVELOPMENT FUND (A LIMITED PARTNERSHIP) CONSOLIDATED BALANCE SHEETS MARCH 31, 1999 AND DECEMBER 31, 1998 - -------------------------------------------------------------------------------- March 31, 1999 December 31, 1998 -------------- ----------------- ASSETS Cash and cash equivalents ................. $ 84,538 $ 83,408 Receivables: Unbilled rent .......................... 52,440 47,993 Billed rent ............................ 6,574 8,297 Due from affiliates ....................... 104,916 26,916 Income-producing property - net of accumulated depreciation and valuation allowance of $3,151,793 and $3,140,905, respectively ............................ 2,707,100 2,772,712 Other assets .............................. 243,224 252,588 Excess distributions to minority Partner .. 77,996 75,610 -------------- ----------------- Total Assets .............................. $ 3,276,788 $ 3,267,524 ============== ================= LIABILITIES AND PARTNERS' EQUITY Accrued and other liabilities ............. $ 136,709 $ 82,019 Note payable .............................. 1,708,933 1,720,324 -------------- ----------------- Total Liabilities ......................... 1,845,642 1,802,343 -------------- ----------------- Partners' equity: General Partner ......................... 0 0 Limited Partners: 30,000 units authorized, 29,354 issued and outstanding ............................ 1,431,146 1,465,181 -------------- ----------------- Total Partners' equity .................... 1,431,146 1,465,181 -------------- ----------------- Total Liabilities and Partners' equity .... $ 3,276,788 $ 3,267,524 ============== ================= UNAUDITED SEE ACCOMPANYING NOTES 4 SIERRA PACIFIC DEVELOPMENT FUND (A LIMITED PARTNERSHIP) CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998 - -------------------------------------------------------------------------------- 1999 1998 --------- --------- REVENUES: Rental income ................................ $ 214,772 $ 203,881 --------- --------- Total revenues ....................... 214,772 203,881 --------- --------- EXPENSES: Operating expenses ........................... 126,351 125,117 Depreciation and amortization ................ 86,305 91,716 Interest ..................................... 38,537 39,521 --------- --------- Total costs and expenses ............. 251,193 256,354 --------- --------- LOSS BEFORE MINORITY INTEREST'S SHARE OF CONSOLIDATED JOINT VENTURE LOSS ........... (36,421) (52,473) --------- --------- MINORITY INTEREST'S SHARE OF CONSOLIDATED JOINT VENTURE LOSS .............. 2,386 4,896 --------- --------- NET LOSS ....................................... $ (34,035) $ (47,577) ========= ========= Net loss per limited partnership unit .......... $ (1.16) $ (1.62) ========= ========= UNAUDITED SEE ACCOMPANYING NOTES 5 SIERRA PACIFIC DEVELOPMENT FUND (A LIMITED PARTNERSHIP) CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' EQUITY FROM FEBRUARY 13, 1981 (INCEPTION OF PARTNERSHIP) TO DECEMBER 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1999 - --------------------------------------------------------------------------------
Limited Partners Total ---------------------------- General Partners' Per Unit Total Partner Equity ------------ ------------ ------------ ------------ Proceeds from sale of partnership units .............. $ 500.00 $ 14,677,000 -- $ 14,677,000 Underwriting commissions and other organization expenses (60.29) (1,769,862) -- (1,769,862) Cumulative net income (loss) (to December 31, 1998) ......... (223.05) (6,547,484) $ 14,600 (6,532,884) Cumulative distributions (to December 31, 1998) ......... (166.75) (4,894,473) (14,600) (4,909,073) ------------ ------------ ------------ ------------ Partners' equity - January 1, 1999 49.91 1,465,181 0 1,465,181 Net loss ......................... (1.16) (34,035) (34,035) ------------ ------------ ------------ ------------ Partners' equity - March 31, 1999 $ 48.75 $ 1,431,146 $ 0 $ 1,431,146 ============ ============ ============ ============
UNAUDITED SEE ACCOMPANYING NOTES 6 SIERRA PACIFIC DEVELOPMENT FUND (A LIMITED PARTNERSHIP) CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998 - -------------------------------------------------------------------------------- 1999 1998 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss ........................................... $(34,035) $(47,577) Adjustments to reconcile net loss to cash provided by operating activities: Depreciation and amortization .................... 86,305 91,716 Minority interest's share of consolidated joint venture loss ............................. (2,386) (4,896) (Increase) decrease in rent receivable ........... (2,724) 4,033 (Increase) decrease in other assets .............. (11,329) 2,204 Increase in accrued and other liabilities ........ 54,690 3,763 -------- -------- Net cash provided by operating activities ........ 90,521 49,243 -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on note payable ............... (11,391) (10,415) Loan to affiliate ................................ (78,000) (38,500) -------- -------- Net cash used in financing activities ............ (89,391) (48,915) -------- -------- NET INCREASE IN CASH AND CASH EQUIVALENTS .............................. 1,130 328 CASH AND CASH EQUIVALENTS Beginning of period .............................. 83,408 87,192 -------- -------- CASH AND CASH EQUIVALENTS End of period .................................... $ 84,538 $ 87,520 ======== ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for interest .......... $ 38,622 $ 39,599 ======== ======== UNAUDITED SEE ACCOMPANYING NOTES 7 SIERRA PACIFIC DEVELOPMENT FUND (A LIMITED PARTNERSHIP) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------------------------------------ 1. ORGANIZATION In February 1994, the Partnership created a general partnership (Sierra Creekside Partners) with Sierra Mira Mesa Partners ("SMMP") to facilitate cash contributions by SMMP for the continued development and operation of the Sierra Creekside property. The Partnership Agreement of Sierra Creekside Partners (the "Agreement") was amended effective January 1, 1995 to consider both contributions and distributions when calculating each partners' percentage interest at January 1 of each year as called for by the Agreement. Accordingly, on January 1, 1999, the Partnership's interest in Sierra Creekside Partners was increased from 90.67% to 93.45% to reflect 1998 contributions and distributions. 2. BASIS OF FINANCIAL STATEMENTS The accompanying unaudited consolidated condensed financial statements include the accounts of the Partnership and Sierra Creekside Partners, a majority owned joint venture at March 31, 1999. All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Partnership's management, these unaudited financial statements reflect all adjustments which are necessary for a fair presentation of its financial position at March 31, 1999 and results of operations and cash flows for the periods presented. All adjustments included in these statements are of a normal and recurring nature. These financial statements should be read in conjunction with the financial statements and notes thereto contained in the Annual Report of the Partnership for the year ended December 31, 1998. 3. RELATED PARTY TRANSACTIONS Included in the financial statements for the three months ended March 31, 1999 and 1998 are affiliate transactions as follows: March 31 ----------------------- 1999 1998 ----------------------- Management fees $ 9,324 $ 8,723 Administrative fees 8,936 8,831 Leasing fees 0 7,216 UNAUDITED 8 Sierra Pacific Development Fund Notes to Consolidated Financial Statements Page two 4. PARTNERS' EQUITY Equity and net loss per limited partnership unit is determined by dividing the Limited Partners' share of the Partnership's equity and net loss by the number of limited partnership units outstanding, 29,354. UNAUDITED 9 PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits The following Exhibits are filed herewith pursuant to Rule 601 of Regulation S-K. EXHIBIT NUMBER DESCRIPTION OF EXHIBIT - ---------- ----------------------------- 27 Financial Data Schedule (b) Reports on Form 8-K None SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report be signed on its behalf by the undersigned thereunto duly authorized. SIERRA PACIFIC DEVELOPMENT FUND a Limited Partnership S-P PROPERTIES, INC. General Partner Date: MAY 4, 1999 /S/ THOMAS N. THURBER ----------------- ------------------------------- Thomas N. Thurber President and Director Date: MAY 4, 1999 /S/ G. ANTHONY EPPOLITO ----------------- ------------------------------- G. Anthony Eppolito Chief Accountant 10 EX-27 2
5 THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SIERRA PACIFIC DEVELOPMENT FUND MARCH 31, 1999 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS DEC-31-1999 MAR-31-1999 84,538 0 59,014 0 0 196,028 5,858,893 3,151,793 3,276,788 136,709 1,708,933 0 0 0 1,431,146 3,276,788 214,772 214,772 0 126,351 86,305 0 38,537 (34,035) 0 (34,035) 0 0 0 (34,035) (1.16) (1.16)
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